Need advice in MO.

Started by VincentB3 • 7 replies • 2141 views

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VincentB3 (Missouri)
Posts: 1

Posted:

Here is my issue. My homeowners president is apparently the treasurer. At many of the meetings he has always told us the financial books are available to the owners for review. Our dues have gone through the roof over the past few years. $770.00 per year. We have only 84 units and the dues cover snow removal ( streets only), lawn care and a pool.

We decided to conduct an audit of the books and guess what he basically refused. We were told we could come by at his convienance and review at his residence for an hour or two, but that was it. We requested to photocopy the books and bank statements at our expense and he refused. After contacting the association attorney we were met with more resistance. This person told us a few years ago of his financial struggles. Recently he has installed new windows, siding, and a roof. He has confided in other people that he is nervous about why we would want to audit the finances. We have also been told the records are in disarray and incomplete

I have spoken to our local police departments financial crimes unit and they have refused to look into this matter and advised it is a civil matter. I don't agree because there is enough reasonable suspicion to open an investigation. I have spoken to our county courthouse regarding the filing of a small claims suit to obtain a judgement to look at the records. I was told the judge would not rule on such matters.

My next step was to file a complaint with FBI. It is a long shot but I believe that the possible embezzlement has been occurring for years and would possibly reach an amount that would warrant opening on investigation. I don't really want to go that route bu I feel I am left with no other alternatives. I have also called the MO attorney generals office and again met a dead end.

Any suggestion are appreciated. Are there any governing bodies for associations in MO?

Respectfully,
VB

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Wow you really are barking up some of the wrong trees here. Glad your coming here for advice because you don't need the FBI involvement in this at all. Plus all the other avenues you went down.

People in HOA's despite themselves, tend to handle the money of the HOA similar to their OWN bank accounts. It really is that simple. How often do you even speak to your significant other, friends, kids, or relatives about YOUR bank account? What would your reaction be if they saw you wearing a really NICE watch? Wouldn't you be offended a bit when they say you don't make enough to afford it? Especially if they don't even know how much that watch cost?

Trying to point this out so you can approach this situation from a different angle. It sounds like your President/Treasurer isn't stealing as much as he's just NOT good at finances. You have heard so much yourself. You can't expect a person who can barely pay their own bills to be a good manager of OTHER people's money.

It may be time to approach the board to request that you all pay an accountant/bookkeeper instead of overwhelming the President. It's an added expense but may be necessary as they are PROFESSIONALS and NOT volunteers. You may also try an approach as to request that the bills are discussed at the meetings. That is how we had our meetings. We would go over the financial statements (Except for Collections as they were just for Board members).

The BEST piece of advice I ever got on a HOA budget is that the money in it is NOT my money. It is ALL the members. It works much like a "Kitty" in a poker game. Everyone tosses into it and the best bet/bluff wins. The issue may just be the lack of education/experience on budgets. Not everyone is capable of handling that aspect.

Former HOA President

BrianB (California)
Posts: 2,820

Posted:

1) are there governing bodies for HOA's in Missouri? Yes, they are called owners.

2) CHeck your by-laws for rules on viewing the accounts. take a copy with you. Honestly, you have the right to see the books, you have the right to copy them at cost... you may not have rights to remove them, but you have rights to see and obtain a copy. Arm yourself with facts, speak nicely to the prez/trez, and go.

3) offer to help balance the books, double check them, organize them, etc.. as stated before, it's your money, it's your neighbor's money... go check on it, offer to assist, be professional and be as nice as possible. Honey/bees, that sort of thing.

4) and then vote in a new board at your next election.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By VincentB3 on 04/09/2011 2:48 PM

At many of the meetings he has always told us the financial books are available to the owners for review.

We decided to conduct an audit of the books and guess what he basically refused. We were told we could come by at his convienance and review at his residence for an hour or two, but that was it. We requested to photocopy the books and bank statements at our expense and he refused.

We have also been told the records are in disarray and incomplete

Have you gone to physically see the books yourself? I ask because your posting doesn't say anyone actually took the time to look at the books.

Who is the "we" you refer to? Are they a large number of members or only a few?

Who wanted an audit - a majority or a minority of the membership?

Was there a membership vote on having an audit performed (goes back to the who is "we" question)?

Audits can be great tools. If your Association documents don't require audits, perhaps it can be brought up at the next annual meeting.

I would suspect that he refused to allow you to photocopy the books because either he would have to allow someone to take the books home or go and do the job himself. One removes the custody of the records from him (which he has a duty to maintain) and the other requires additional time on his part. Perhaps you could take a laptop and scanner with you when you view the records.

I'm not surprised that the police didn't get involved. Suspicion is not evidence. It could just be a perception based on what people have heard. If I understand your posting correctly, he did offer for people to review the books. You also stated he wanted to limit it to only a few hours. That is certainly understandable as I suspect he would like some family time and is already volunteering hours serving on the Board.

I'm concerned that you stated the individual is serving as both President and Treasurer. Are their vacant seats on the Board? If there are, perhaps you or others would be willing to serve on the Board and take some of these duties over.

You mentioned that you heard the "records are in disarray and incomplete". Many people have different styles of organization and keeping records. I would suspect that if you had each of the members bring their check books and compare them you would find varied levels of completeness. When the Association is served by volunteers, they bring their style of organization with them.

Tim

SusanW1 (Michigan)
Posts: 5,202

Posted:

A lot of speculation and assumption here. I know that one homeowner in our sub spread an embezellment rumor about our treasurer because she re-modeled her house. That's a big stretch . . . .

Stick to the facts:

Is he providing monthly financial reports to the board?

Are dues collections up to date and is there a followup procedure to non payments?

Work to establish a Finance Committee to take some the of pressure off this one person who is wearing two hats.

(PS I don't think that copying the ledger is part of the "right to inspect". He should be able to provide a p/l, balance sheet statement and y-t-d vs. budget at the flick of a computer.

Sounds like this guy needs help, not critisism.

MichaelK20 (Missouri)
Posts: 1

Posted:

I also live in Missouri, specifically St. Peters. I am part of a HOA. 3 years ago the head of the association stole $20,000(or more). I know, I filed the police report. So to say these things don't happen, that they are just balancing their check book is naïve at best. Put a pile of money on the table, and eventually someone will take it.

I am petitioning in MO for the legislature to put require HOA's to register with the Secretary of State as non-profit businesses. There currently is nothing in the Missouri State Statutes that addresses this currently. There has been numerous complaints in the Ozarks where the HOA's left and left the home owners holding the bag. It then makes the property extremely difficult to sell.

Everyone says "to hire an attorney", or to sue. What you need to know before you decide to sue, is to look at the indenture agreement and make sure that the other home-owners including yourself, don't have to pay for this suit. You could wind up losing the suit and having to pay HOA's attorney's fees.

In Arizona they have a procedure, for $500. I think, that will look into the validity of what the HOA might be doing to the home owner. Usually only people that sue HOA's are people with deep pockets, a class action of a number of residents, or attorney's doing their own work.

Pretty depressing isn't it?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Michael,

This is an old thread. You might do better starting a new thread.

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